That is the proposition at the core of mortgage escrow services, in which lenders collect money on the borrower's behalf as part of the monthly mortgage payment, then use those funds to pay the borrower's real estate taxes and homeowner's insurance, usually twice a year.
Government-insured loans such as those backed by the Federal Housing Administration or the Veterans Administration mandate escrow accounts for borrowers, mostly because they eliminate the risk that a borrower will default on taxes or fail to insure the house.
Borrowers with less than 20 percent equity in their homes must also use escrow accounts, except in California, where the threshold is 10 percent
